From Sustainable Development Goals to Economy of Life - Goals for Africa - Rogate R. Mshana

Abstract: The vision of an economy in the service of life, where poverty is eradicated, social justice is embraced and ecological justice promoted, must be the essence of the next generation of Sustainable Development Goals and beyond.

This article is a part of the Pambazuka Special Issue "From MDGs to SDGs: Claims vs. reality", published on May 29th 2015 as a result of the cooperation between AfricAvenir and Pambazuka.

We live in a world of paradoxes. On the one hand, the world has never been wealthier: In spite of the global financial and economic crisis of 2008, global wealth grew to US$120 trillion in 2010 – an increase of 20 percent since 2007. Yet, on the other hand, the world has never been more unequal. Inequality is increasingly becoming a worldwide problem. For any development plan, the problem of the gap between the rich and the poor widening needs to be fully addressed if poverty is to be eradicated.

The rise in inequality is linked to the growth paradox: even where wealth creation at the national level has occurred, this has not necessarily led to poverty reduction. Global economic corruption mutated in relations between corporations and countries sharpens the concentration of wealth for a few. So-called investors in Africa – be they from China, the EU or the US – take advantage of poorer nations by making unfair deals that do not benefit the people but only the investors.

Oxfam illustrates this in the following way: The world's wealthiest people are not known for travelling by bus, but if they fancied a change of scene, the richest 85 people on the globe – who between them control as much wealth as the poorest half of the global population put together – could squeeze onto a single double-decker.

The extent to which so much global wealth has become corralled by a virtual handful of the so-called 'global elite' is exposed in a report published recently by Oxfam[1] . It warned that those richest 85 people across the globe share a combined wealth of £1tn, as much as the poorest 3.5 billion of the world's population. If this inequality is not addressed between and within nations, one doubtfully wonders whether poverty and ecological injustice will ever be addressed fully and sufficiently.

FAILURE OF THE MDGS AND ITS FOLLOW-UPS

In 2000, during the Millennium Summit, the United Nations created the eight Millennium Development Goals (MDGs) which aimed at halving poverty by 2015. At the outset, critics were sceptical about the envisaged success because those goals were based on palliative economics, which in essence are aimed at throwing sand in the wheels of poverty instead of eliminating it. Indeed, nine years of diverse efforts to meet the MDGs by governments from various countries led to very minimal achievement, particularly in Sub-Saharan Africa. The 8th MDG, somehow the mother of all goals, focusing on trade and international cooperation, was the least detailed. Its success would have been absolutely essential for the success of the other goals, but it was never fully implemented. Instead, we witnessed Africa under pressure to sign Economic Partnership Agreements (EPAs) with the EU, which did not benefit Africa, but are entirely in favour of Europe.

In order to eradicate poverty in Africa, several experiments took place including projects such as the Millennium Development Villages[2] , spearheaded by the American Economist Jeffrey Sachs whose book The End of Poverty outlines his vision on how to deal with poverty in Africa. The underlying economic assumption is that poverty is like a disease that can be cured by targeted development aid. For instance, more money is supposed to be used to buy mosquito nets for the impoverished villages to avoid malaria. Children need to be given meals in schools to encourage them to attend classes with a full stomach. According to Sachs, efforts to increase development aid are the solution to the perceived problem of “underdevelopment”. While such aid is helpful in the short term, its sustainability is questioned by critics arguing that aid cannot be sustainable.

While the first generation of development goals were expected to be achieved by enhanced neoliberal economic growth in each country, the second generation of goals is still based on the same assumption. But, as various commentators on the failure of the MDGs have noted, the neoliberal economic growth, which is based on the concept of trickle-down, cannot eradicate poverty, as it does not address economic injustice and inequality.

At the national level, an economy that is already only enriching the rich is designed to provide incentives for the elites, by providing them with tax cuts in order to create jobs for the rest of the population. In other words, it is expected that as they become increasingly rich, their wealth will trickle down reaching those that are in poverty in two ways: firstly by creating jobs, and secondly by subsidizing grants. At the global level, this means that rich countries provide development aid to poor countries. In both cases poverty is viewed as a problem which can be solved by throwing money at it.

ILLICIT FINANCIAL FLOWS

When one looks at the current report from the Washington-based Global Financial Integrity group regarding wealth outflows from developing countries to rich countries, it becomes clear that during the time span of implementing the MDGs, $6.6 trillion that could have contributed to inclusive sustainable economic growth in developing countries was illicitly drained from these countries. According to Global Financial Integrity, this equals nearly 4 percent of the entire global economy[3] . The group observed that illicit financial flows around the world grew at a rate of 9.4 percent a year in the decade to reach in 2012 nearly double the pace of economic growth, draining funds especially from impoverished countries. The main way the money flows out of the countries is through mis-invoicing in trade transactions, which allows exporters and importers to keep money out of the country.

If the second generation of development goals is supposed to succeed, it has to embark on a new understanding of seeing injustice as the main cause of poverty and these flows have to be addressed. Individual countries and the United Nations will have to look at injustice and inequality as causes of poverty.

ECONOMY OF LIFE INSTEAD OF INEQUALITY

This idea is promoted by the concept of the economy of life - a new paradigm being proposed by the ecumenical movement amongst others, which was first discussed in October 2013. It envisages an economy that is not only based on economic growth, but addresses poverty, inequality and ecological destruction. It is an economy opposing the mere speculation of finance without linking it with the real economy where production, consumption and distribution take place. The movement concluded that the belief that growth through unfettered markets alone can bring prosperity has now brought intertwined crises. This paradigm has failed. This current neo-liberal economic paradigm is based on the fact that free market when left alone without state intervention can bring prosperity for all. The financial crisis has revealed clearly that regulatory measures are imperative and that a democratic state has a role to play when markets fail.

So-called free markets and growth alone cannot eradicate poverty and inequality. This myth has already been analyzed and reflected upon by global economic and financial policy makers but the pundits of free market are still influential in the world today while global corporations have not abandoned this paradigm. So-called emerging economies are enforcing this paradigm. Cutting edge research like the work of the United Nations Development Program, The new Economic Foundation and many civil society organizations have clearly shown the need to transform the current economic thinking.

Evidence shows that between 1990 and 2001, for every $100 worth of growth in the world’s per person income, just $0.60 found its target and contributed to reducing poverty below the $1-a-day line. As a result, to achieve a single dollar of poverty reduction, $166 of extra global production and consumption is needed, with enormous environmental impacts which counter-productively hurt the poorest most. The New Economic Foundation stated, “We need to move decisively from the inefficiency of relying on global growth for poverty reduction, towards a system in which policies are designed explicitly and directly to achieve our social and environmental objectives, treating growth as a byproduct.”[4]

The concept of an economy of life is an acknowledgement that humanity cannot solve the current intertwined crises by solely believing in growth without limits through unregulated markets. Under the Economy of life, policies are essentially to be designed in a way that will eliminate these three challenging problems faced by humanity today. It is also a paradigm that starts from the knowledge of the people about their environments – instead of putting markets first.

People living in poverty are denied and deprived of basic human rights by social systems designed to further the few at the expense of the many. To change this condition makes it therefore imperative to seriously work on an economy of life. A number of people come from countries that experience grinding poverty and hunger. They are dying daily because of the lack of food. We are all aware of alarming global and national statistics on these problems. We all know that the MDGs’ aim of halving poverty by next year is far from being met. After the financial crisis in 2008 people around the world, particularly youths and women, fell into poverty and unemployment. Yet huge amounts of money are spent on armaments and other priorities while no attention is being paid to suffering people.

Our concern today is that those who are responsible for formulating national and global economic, financial and ecological policies have not addressed the real roots of the problem. The concept of growth without limits is still the mantra of most policy makers, instead of the goal of eradicating poverty by intentionally investing into people. In other words, we need pro-poor growth policies that begin with the people. There are countries that really need qualitative and inclusive growth. The issue of prolonged concentration of wealth in the hands of a few, while the majority barely survives has not been fully addressed for a long time. Goals for an economy of life must be based on how to deal with this problem.

NEED FOR A NEW FINANCIAL AND ECONOMIC ARCHITECTURE

As confirmed by the Stiglitz Commission of the UN and most of the over 8,000 social movements composing the World Social Forum, as well as by ecumenical studies and consultations, the experience of impoverishment is shaped by a financial and economic architecture that is addressing neither poverty nor ecological destruction. The question again is: Do the Sustainable Development Goals include the issue of resolving the link between finance and “real” economy as a way of eradicating poverty?

In the extractive regions of Africa, the continent is left with gaping holes on the ground after oil and minerals are removed. Very little to no benefit at all is left for the development of the region and its inhabitants. Such practices need to be stopped. There are actors who have raised their voices against this injustice. One example is the case of gold mining in Tanzania, where the interfaith council of Moslems and Christians challenged the government by visiting gold mining areas and requesting the government to ensure that communities evicted from mining areas be compensated. They argued that gold and diamonds should be for the benefit of the people.

Without addressing this issue of equitable production, consumption and distribution of goods and services at various levels, issues like gender injustice, poverty, marginalization, climate change, indebtedness, economic bubbles and crashes will persist. Let us work together to experience justice and peace; let us work together to set in place economies of life and ecological justice. We have spoken so many times about the eradication of poverty, but statements have not been sufficiently followed by actions. We must engage ourselves in advocating for poverty eradication by investing in the people. Finance must serve the people and must not be detached from the “real” economy[5].

The vision of an economy of life in the service of life, where poverty is eradicated, social justice is embraced and ecological justice promoted, must be the essence of the next generation of Sustainable Development Goals and beyond. There is the need to outline goals for an Economy of Life in Africa. Such an economy should invest in the people of Africa, address poverty eradication and inequality on the one hand, while investing in energy technology (such as solar, biogas and small hydro power stations) on the other. The use of charcoal in Africa for example is due to the lack of access to energy for the majority of the population. The resulting environmental disasters of tree cutting are well known.

The issue of industrialization in Africa must also be part of the goals of an economy of life. Africa must industrialize itself; otherwise, it will never be able to eradicate poverty. In the 1960s Africa was expected to industrialize, but such plans were abandoned while they were implemented in Asia. Africa has remained a producer of commodities and raw materials for industrial countries until today. The goals for the economy of life in Africa must focus on investing in people and industrializing Africa in the 21st century.

[2] Millennium Villages are based on the idea that impoverished villages can transform themselves and meet the Millennium Development Goals if they are empowered with proven, powerful, practical technologies. By investing in health, food production, education, access to clean water, and essential infrastructure, these community-led interventions are supposed to enable impoverished villages to escape extreme poverty, something that currently confines over 1 billion people worldwide (http://millenniumvillages.org/).

[3] It is possible to download the report [url=http://www.gfintegrity.org/wp-content/uploads/2014/12/Illicit-Financial-Flows-from-Developing-Countries-2003-2012.pdfhere[/url].

[5] By real economy, I mean an economy that is not based on speculation and addresses the issues of inequality, poverty eradication and ecological sustainability.

* Dr. Rogate R. Mshana works with Ecolife Center, Arusha, Tanzania.

With the friendly support from Landestelle für Entwicklungszusammenarbeit and Engagement Global.

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